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Last Updated: Wednesday, 15 March 2006, 06:12 GMT
Bernanke voices US deficit fears
Fed chief Ben Bernanke
The US budget deficit is expected to hit record levels this year
US Federal Reserve chairman Ben Bernanke has voiced concerns over the size of the US budget deficit.

Mr Bernanke warned persistent deficits need to be curbed, particularly as an ageing population will raise pressure on government spending.

Widening the deficit would put future living standards at risk, he added.

"As a result, I think it would be very desirable to take concrete steps to lower the prospective path of the deficit," he said.

The comments came in a letter - dated 9 March - to Senator Robert Menendez following his statement to the Senate Banking Committee on February 16.

Ageing population

The letter said Mr Bernanke was quite concerned about the "intermediate to long-term federal budget outlook".

It added that US finances were expected to come under "severe pressure" as baby-boomers began to retire and collect their Social Security and Medicare benefits

White House forecasts predict the US deficit will swell to a record $423bn (354bn) this year, from the $319bn (267bn) recorded last year.

The release of Mr Bernanke's letter came ahead of the release of the Federal Reserve's latest Beige Book survey - an anecdotal round up of economic conditions by the central bank's 12 regional banks.

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